Sold! Canada's Fairfax buys Thomas Cook India

Canada's Fairfax Financial Holdings Ltd will buy Thomas Cook Group's 77 percent stake in its India operations for about $150 million, as the UK holiday firm continues to pay down its debt.

Property and casualty insurer Fairfax's unit Fairbridge Capital will pay Rs 50 per share of Thomas Cook (India) Ltd for a total of Rs 817.4 crore. The offer represents an 18 percent discount to Thomas Cook India's closing price of Rs 61.05 on Monday on the National Stock Exchange.

[caption id="attachment_316966" align="alignleft" width="380" caption="Fairbridge, part of India-born billionaire Prem Watsa's Fairfax Financial, will pay Rs 50 rupees per share for its 77.1 percent stake. Reuters"][/caption]

In February, Thomas Cook confirmed that it was seeking a buyer for its stake in its Indian unit in an effort to reduce its 890 million pounds debt. Fairbridge Capital has pipped PE funds Carlyle and TA Partners to emerge as the winner.

Fairfax's CEO Prem Watsa, a value investor whose approach and acumen is sometimes compared to Warren Buffett's, said Madhavan Menon will continue as Thomas Cook India's CEO.

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Prem Watsa, Chairman and Chief Executive Officer of Fairfax, said "We are pleased to announce this acquisition and to own such a well-known and strong Indian business. We look forward to a seamless ownership transition under the continued leadership of Madhavan Menon, TC India's Chief Executive Officer, and his excellent team. This is the inaugural acquisition in India by Harsha Raghavan and his colleagues at Fairbridge Capital and we are excited by the exceptional opportunities we expect we will see in India in the future."

Watsa, an Indian-born Canadian investor who took control of Fairfax in 1985, also sits on the board of Research in Motion and holds a 19 percent interest in pulp and paper company Abitibibowater.

According to a report in the Economic Times, the terms of the deal include include the right to use the Thomas Cook brand name for twelve-and-a-half years. The brand licensing rights will be applicable to countries such as India and Mauritius.

Agencies